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CFPB restructure bill 'a step in right direction,' CUNA says

WASHINGTON (2/11/14)--A bill that would change the Consumer Financial Protection Bureau leadership structure and make some operational changes is s a step in the right direction, the Credit Union National Association said in a Monday letter to Congress.

The Consumer Financial Protection Safety and Soundness Improvement Act of 2013 (H.R. 3193) would help to assure credit unions--and other entities--already subject to considerable regulation are not unnecessarily burdened, CUNA President/CEO Bill Cheney said in a Monday letter to Speaker of the House John Boehner and House Democratic Leader Nancy Pelosi.

The letter was delivered to key lawmakers in anticipation of a vote this week on the bill.

"Credit unions remain among the most highly regulated entities in the financial services sector. While the CFPB has taken several steps to solicit feedback regarding the impact of its regulations on credit unions, the fact remains that regulatory burden has continued to increase in the two and a half years since the bureau" launched, Cheney wrote.

Cheney said credit unions are disappointed the CFPB has not used the full authority granted to it in the Dodd-Frank Act to exempt certain types of institutions from some regulations. "The CFPB's rules should target the abusers of consumers and encourage credit unions to provide services to their members, but that is not what has happened during the first few years of the CFPB's history," he wrote.

The CUNA CEO offered the remittance rule and mortgage rules as examples: "When the remittance rule was finalized, several credit unions stopped offering the service to their members. And we expect some credit unions to reduce credit availability to borrowers who may not qualify for qualified mortgages under the CFPB mortgage rules," he wrote.

"How exactly are consumers being better protected when the regulations promulgated by the CFPB reduce availability of and access to these financial services offered by not-for-profit cooperative credit unions?" Cheney asked.

H.R. 3193 would:

Restructure CFPB leadership from a single director to a five-member panel;

Authorize the Financial Stability Oversight Council to set aside any CFPB regulation that is found to be inconsistent with safe and sound operations of financial institutions;

Require the CFPB to take into consideration the impact of its rules on insured depository institutions;

Prohibit the CFPB from requesting, accessing, collecting, using, retaining or disclosing nonpublic personal information about a consumer, unless clearance has been granted; and

Make CFPB funding subject to the congressional appropriations process.